No Deal: GM to Kill Saturn Line
DETROIT - Penske Automotive Group announced Wednesday afternoon that it has canceled plans to buy General Motors' Saturn brand, after a deal with an unidentified third company to supply future vehicles fell apart.
GM followed with an announcement that it will be winding down the Saturn brand and dealership network.
In a statement, Penske cited concerns related "to future supply of vehicles beyond the supply period it had negotiated with GM."
Bloomfield Hills, Mich.-based Penske said it had negotiated a deal to get products manufactured by another company but that agreement had fallen apart.
"That agreement was rejected by that manufacturer's board of directors," Penske said in a statement. "Without that agreement, the company has determined that the risks and uncertainties related to the availability of future products prohibit the company from moving forward with this transaction."
Penske declined to identify that automaker.
GM and Penske had been negotiating toward a final agreement since June 5. The terms of the original agreement called for GM to continue providing Saturn with vehicles for two years.
At the time, Roger Penske, chairman of Penske Automotive, said they had "been in discussions during this diligence period with a number of manufacturers on a worldwide basis. ... We would expect to have a lineup going forward, which would be manufactured by a worldwide partner."
In early 2009, GM said it planned to wind down Saturn if a buyer could not be found.
"This is very disappointing news and comes after months of hard work by hundreds of dedicated employees and Saturn retailers who tried to make the new Saturn a reality," Fritz Henderson, GM's CEO, said in a statement.
He noted that Penske's statement "explained that their decision was not based on interactions with GM or Saturn retailers; rather it was because of the inability to source new products beyond what it had asked GM to build on contract."
Henderson added that GM will be winding down the Saturn brand and dealership network "in accordance with the wind-down agreements that Saturn dealers recently signed with GM."
Once Saturn is done, Saturn owners will be able to get their vehicles serviced at other GM dealerships.